The business of a foreign bank is dependent more upon its reserves and deposits than upon the amount of its capital. As a matter of fact, except in the first few years of the existence of a foreign bank, the total capital plays only a secondary part in the business. The more the money available in the coffers the more the business of the bank and the larger the profits. The larger the total of the reserves the greater the risks the bank is able to take; it is well understood, of course, that the increase or decrease in the profits is regulated by the risks which the bank is in a position to take. With the deposits, the position is slightly different. While the bank may take risks with its reserves it can by no means take similar risks with the deposits. There is a great deal of profit, however, in using them cautiously while taking all precautions to save them from being lost. The native banks, on the other hand, have few of the facilities which come in the way of foreign banks as a matter of course. As a rule, Chinese have not understood the value of reserves or depreciation. As all business, including banking, is generally owned by single individuals, or in rare instances by families or small groups, the profits are at once taken out of the business and the losses are deducted from the capital. In Europe, the main purpose of the management of joint-stock companies is to maintain the institutions, irrespective of who the shareholders may be. In China the object is to obtain profit for the proprietor or the proprietors, and everything, including the existence of the institution, is subservient to it. When this is understood it is easy to follow the working of native banking in this country.